Use Your Climate Credit to Ask for More

In the next month, millions of Californians will receive their first "climate credit." The credit will appear as a line item of about $35 on household electric utility bills for customers of PG&E, Southern California Edison, San Diego Gas & Electric, and a few others around April or May. Six months later, another credit will appear. The funds come from the revenue collected by the cap and trade program under the State's climate change law. Instead of going to pay for government programs or rebates, the money is going back to you. That is pretty unusual.

Even more remarkable is that when the California Public Utilities Commission (CPUC) decided to send the funds back to households, they stated that:

Returning revenues equally to all residential customers is more equitable and comports with the idea of common ownership of the atmosphere given that residential ratepayers will ultimately bear the increased costs as a result of the Cap-and-Trade program.

For those just tuning in, the State's press releases and several news articles might seem to imply that the credit is primarily intended to encourage people to go out and buy LED lights. This is inaccurate. If the State CPUC had only wanted promote LED lightbulbs, they could have just funded a rebate on certain products. There are already hundreds of rebates available, but the credit is not one of them. With the credit, the CPUC said explicitly, this is your money, you should get it back. Even the state legislature -- crowded with people whose job is to not leave unspent dollars on the table -- said that the people should get back at least 85 percent of these funds (to which the CPUC replied they prefer the whole 100 percent). That's a pretty strong indication that this money is special.

The Credit -- Not Quite a Dividend

In the CPUC's decision creating the climate credit, they initially called it a "dividend" (as in Cap & Dividend or Fee & Dividend, where funds raised by a carbon price are returned to people), and referred to the atmospheric Commons we all share. Then the State's marketers got focus groups together, and realized that most people don't know what "dividend" means. The focus groups preferred calling a line item on their electricity bill a "credit." The focus groups may not have known it, but they were correct in using "credit" for the on-bill line item because it is not a true dividend, which would be delivered off-bill, perhaps on a debit card.

Similarly, Senator Darrell Steinberg's (D-Sacramento) recent proposal for returning most of the carbon price revenues on transportation fuels back to low-income families through an Earned Income Tax Credit is a fee and rebate, not a dividend. But the climate credit and tax rebate still deserve support as steps towards dividends and opportunities for further education.

The inaugural climate credit should serve as a reminder to State leaders that revenues from the atmospheric Commons are funds that belong to the people and should be returned to them. The State is now reviewing its AB32 Scoping Plan for the next five years, and large infrastructure such as the high-speed rail program ("Cap and Rail") threatens to suck up a huge portion of what should be a substantial people's dividend. The climate credit, as small as it is, could be the catalyst for a different outcome -- if it is used wisely.

Invest Your Credit in Getting More Dividends

The climate credit came into being due to advocacy that overcame major opposition. Those groups could use your help, and would use those funds to educate more policymakers about the ideas of the Commons and that more funds should be returned to households as dividends, credits, and rebates. You can support those efforts by giving the amount of your climate credit to groups advocating for a carbon price with dividends. While you're at it, you can join groups that are educating people about the Commons, the intellectual basis for the dividend. The climate credit will be coming every six months, so you can use future credits to donate to groups working to make dividends part of the national debate, or getting dividends into an international climate treaty.